Economics

Gains from trade in a deficit-ridden economy

Article Abstract:

The US has a major trade deficit and this has led to a debate on the benefits of free trade and protectionism. Balanced free trade is usually seen as preferable to economic self-sufficiency. Mild protectionism designed to balance trade could have a beneficial impact, though protectionism should not be used to create trade surpluses. This is indicated by using a static model with a trade deficit, but the cost of the deficit in terms of its impact on local capital may be less when the economy is growing.

Asset specificities, multinational firms and international trade

Article Abstract:

Vertical integration and transaction costs for transnational corporations can be analyzed using methods developed from Coase theory. Coase emphasized the impact of transaction costs on companies' internal organizations. Asset specificities in transactions have been further analyzed by economists, Investment in assets specifically related to transactions may be carried out when a trading relationship is set up. There are a number of impacts of the organization of transnational corporations.

Gains from trade in a deficit-ridden economy

Article Abstract:

Economic research suggests that free trade has a negative impact on social welfare and investment in the US. Historical evidence proves that analysts who suggest that free trade provides an opposite effect are wrong. Graphical representations of the relationship between trade deficit and investment, and trade deficit and wages are illustrated.